Majerus Magic Posted March 18, 2008 Share Posted March 18, 2008 Holy Cow.. Worth 3.54 billion on a Friday and then you come to work on Monday and find out your only worth 236 million. Quote Link to comment Share on other sites More sharing options...
NashvilleBilliken Posted March 18, 2008 Share Posted March 18, 2008 Holy Cow.. Worth 3.54 billion on a Friday and then you come to work on Monday and find out your only worth 236 million. That is an awful story. I read about it yesterday. It just doesn't seem right. There are a lot of people going broke because of this. Quote Link to comment Share on other sites More sharing options...
mcglotherirvin Posted March 18, 2008 Share Posted March 18, 2008 what makes this somewhat relevant to this board is that tony novelly, huge billiken donor, was on the board of bear sterns. not too sure what that means for him. That is an awful story. I read about it yesterday. It just doesn't seem right. There are a lot of people going broke because of this. Quote Link to comment Share on other sites More sharing options...
Supersonic Posted March 18, 2008 Share Posted March 18, 2008 what makes this somewhat relevant to this board is that tony novelly, huge billiken donor, was on the board of bear sterns. not too sure what that means for him. Blurb in the Post said it cost Tony (or one of his companies) $10 Million. The CEO of Bear Stearns just closed on a $27 Million dollar condo in NYC....Ouch! Quote Link to comment Share on other sites More sharing options...
provos528 Posted March 18, 2008 Share Posted March 18, 2008 Just imagine shorting this stock when it was $84.. And they say it is still the tip of the iceberg of what's to come.. Quote Link to comment Share on other sites More sharing options...
moytoy12 Posted March 18, 2008 Share Posted March 18, 2008 nice bounce today, I'm sure JP Morgan did a nice little manipulation job on this. Quote Link to comment Share on other sites More sharing options...
billiken_roy Posted March 18, 2008 Share Posted March 18, 2008 no way i "feel sorry" for anyone associated with bear stearns. the likes of bear stearns are the catalysts to the mess that the economy and the mortgage industry are in. they are the ones that went crazy on the subprime market and set the precedents that just blew up. personally they should have "been allowed" to disappear imo. Quote Link to comment Share on other sites More sharing options...
kshoe Posted March 18, 2008 Share Posted March 18, 2008 no way i "feel sorry" for anyone associated with bear stearns. the likes of bear stearns are the catalysts to the mess that the economy and the mortgage industry are in. they are the ones that went crazy on the subprime market and set the precedents that just blew up. personally they should have "been allowed" to disappear imo. Yup, every one of the 14,000 Bear employees are to blame for this mess. Quote Link to comment Share on other sites More sharing options...
SLUBALLS Posted March 18, 2008 Share Posted March 18, 2008 no way i "feel sorry" for anyone associated with bear stearns. the likes of bear stearns are the catalysts to the mess that the economy and the mortgage industry are in. they are the ones that went crazy on the subprime market and set the precedents that just blew up. personally they should have "been allowed" to disappear imo. Allowing them to simply disappear would have had broader reprecussions than you can imagine. I believe much like you that outsized risks deserve outsized reward or pain, but fear is dictating the market more than anything right now and its blurring the distinction between good assets and bad assets. Nobody wants to find out how a failure of a firm like Bear Stearns would drag everyone down. The moral hazard argument has some merit to it when discussing the Fed bailout of Bear Stearns, but the risk of doing nothing to avert defying a principle was too overwhelming in this instance. The last year will be one the financial community looks back on for reference but in the end there will be another situation where greed overwhelms all participants - investors, investment banks, and brokers - and people will get hurt when it unravels. You can't regulate stupidity. And we are stupid humans making the same stupid mistakes. Quote Link to comment Share on other sites More sharing options...
brianstl Posted March 18, 2008 Share Posted March 18, 2008 Allowing them to simply disappear would have had broader reprecussions than you can imagine. I believe much like you that outsized risks deserve outsized reward or pain, but fear is dictating the market more than anything right now and its blurring the distinction between good assets and bad assets. Nobody wants to find out how a failure of a firm like Bear Stearns would drag everyone down. The moral hazard argument has some merit to it when discussing the Fed bailout of Bear Stearns, but the risk of doing nothing to avert defying a principle was too overwhelming in this instance. The last year will be one the financial community looks back on for reference but in the end there will be another situation where greed overwhelms all participants - investors, investment banks, and brokers - and people will get hurt when it unravels. You can't regulate stupidity. And we are stupid humans making the same stupid mistakes.The only way to really assure this doesn't happen again is to let these firms fail. The belief that a bail out is around the corner if needed has allowed too many banks to take on too many bad loans. It is bad business to put a company in a position that it's survival can be affected by fear in the market. The continued bail out of these firms will only prolong the current situation. A short hard hit is far better for the long-term economic outlook than a long drawn out process. This is a market economy. Big, medium, and small business fail. It is folly to throw taxpayer money in an attempt to save these firms. The market has already decided that those firms shouldn't survive. You never hear anyone calling for a bailout out of all the small businesses that fail every day. The combined employment of those small businesses dwarfs the 14,000 employed at Bear Sterns. Quote Link to comment Share on other sites More sharing options...
billiken_roy Posted March 18, 2008 Share Posted March 18, 2008 letting chase basically have the "bank" ($2 a share when at one time this bank was trading at almost $200 a share) isnt a bailout. all of the innocent bears stearns employee's will be let go within weeks likely. i am not sure what keeping bears around does to help the situation. there are far smaller but innocent enities that will be allowed to fail over the next 2 years that deserved assistance far more than these greedy sob's. unfortunately the panic this crisis is creating and the numbskull attempts by the feds to help thus far is totally bewildering. much more can be accomplished by putting out of business the thinking of and organizations that caused this then saving them. simple steps of making it much tougher to be a mortgage company/broker going forward, forcing difficult licensing and continuing education requirements on mortgage professionals so actual qualified individuals and enitites are the ones dictating the market to the consumers might be nice. instead we see focus on these folks? b.s. total b.s. this did absolutely nothing to help the common man. Quote Link to comment Share on other sites More sharing options...
Majerus Magic Posted March 18, 2008 Author Share Posted March 18, 2008 The first step in fixing the economy is everyone regaining confidence. This recession has been fear driven and the collapse of Bear Sterns only adds to the peoples panic. However, with that said, Brian is right. This is a market economy and if the federal government is going to react every time the market takes a dip we could be in real trouble. The influx of cash and low interest rates are going to lead to an even greater devaluation of the dollar and dangerously high inflation rates. The brokers on Wall Street has Ben Bernancke by the balls and he is succumbing to their every whim. They build in these rate cuts and manipulate the markets so that Big Ben has to cut the rate. Personally, I would love interest rates to stay even and see the fed quit giving out handouts to these mortgage companies that shot themselves in the foot by giving out loans that they have no business giving out. To Hell with them. If I bought a house I couldn't afford and someone was willing to give me the money, everyone involved should know what the risks and repercussions are. Quote Link to comment Share on other sites More sharing options...
brianstl Posted March 18, 2008 Share Posted March 18, 2008 letting chase basically have the "bank" ($2 a share when at one time this bank was trading at almost $200 a share) isnt a bailout. all of the innocent bears stearns employee's will be let go within weeks likely.The government agreeing to guarantee JP Morgan Chase the value of the Bear Sterns balance sheet, is in fact a bailout. It puts the taxpayer on the hook for all of Bear Sterns liabilities. The continued cut of interest rates is a bailout in everything but name. The flooding of the market with liguidity is a desperate attempt to keep these firms afloat. The only thing this will do is delay the inevitable, while costing everyone in the country a large some of money. Think the current soaring gas prices are the result of OPEC production cuts or increased demand? No, it is a result of inflation run amock resulting from the Fed flooding the market with dollars. Quote Link to comment Share on other sites More sharing options...
Pistol Posted March 18, 2008 Share Posted March 18, 2008 no way i "feel sorry" for anyone associated with bear stearns. the likes of bear stearns are the catalysts to the mess that the economy and the mortgage industry are in. they are the ones that went crazy on the subprime market and set the precedents that just blew up. personally they should have "been allowed" to disappear imo. I do. Not anyone at the top, whose decision making was ruled by greed, but the lower-ranking analysts and administrative people there who weren't making the decisions that led to this colossal mess. Even though there are plenty among the ranks of those I mentioned who knew better, there isn't much they could have done to stop what the company was doing. Bear Stearns was buying these mortgages in billion-dollar bundles, and not scrutinizing them enough on a fundamental level- i.e. that they were underwritten correctly and the individual borrowers could actually repay the mortgages. 'Who wants to actually sift through and make sure no one's in over their heads when you have Moody's and S&P stamping them with high investment-grade ratings? So what if no one's done due diligence, with ratings like those and an investment bank like ours, what could possibly go wrong?' Coming out of business school in 2005, my impression was that a job at Bear Stearns was one of the sweetest plums. You had to be at the top of your class, have a bunch of other impressive resume pads, know how to present yourself, and know how to kiss some butt to get that job (not to say everyone who works there is or was a butt kisser). Anyway, there are a lot of driven, highly qualified young workers there who might now be relegated to jobs a notch down from where they were. I do feel bad for the ones who had nothing to do with this debacle. Quote Link to comment Share on other sites More sharing options...
brianstl Posted March 18, 2008 Share Posted March 18, 2008 The first step in fixing the economy is everyone regaining confidence. This recession has been fear driven and the collapse of Bear Sterns only adds to the peoples panic. However, with that said, Brian is right. This is a market economy and if the federal government is going to react every time the market takes a dip we could be in real trouble. The influx of cash and low interest rates are going to lead to an even greater devaluation of the dollar and dangerously high inflation rates. The brokers on Wall Street has Ben Bernancke by the balls and he is succumbing to their every whim. They build in these rate cuts and manipulate the markets so that Big Ben has to cut the rate. Personally, I would love interest rates to stay even and see the fed quit giving out handouts to these mortgage companies that shot themselves in the foot by giving out loans that they have no business giving out. To Hell with them. If I bought a house I couldn't afford and someone was willing to give me the money, everyone involved should know what the risks and repercussions are. The dollar was way over valued before the current fall, but the repeated flooding of the market with dollars runs a high risk of hyper-inflation. Quote Link to comment Share on other sites More sharing options...
willie Posted March 18, 2008 Share Posted March 18, 2008 The first step in fixing the economy is everyone regaining confidence. This recession has been fear driven and the collapse of Bear Sterns only adds to the peoples panic. However, with that said, Brian is right. This is a market economy and if the federal government is going to react every time the market takes a dip we could be in real trouble. The influx of cash and low interest rates are going to lead to an even greater devaluation of the dollar and dangerously high inflation rates. The brokers on Wall Street has Ben Bernancke by the balls and he is succumbing to their every whim. They build in these rate cuts and manipulate the markets so that Big Ben has to cut the rate. Personally, I would love interest rates to stay even and see the fed quit giving out handouts to these mortgage companies that shot themselves in the foot by giving out loans that they have no business giving out. To Hell with them. If I bought a house I couldn't afford and someone was willing to give me the money, everyone involved should know what the risks and repercussions are. Man I thought Hurbert Hoover died along time ago. Our economic system is built on a solid banking system. It may be philosopically ok to say let the weak go out of business but not practical. Bear does not operate in a vacum. If they fail what is to keep the markets from raiding Citi or Nat City, Lehman or Bank America. How about all the Bear Sterns paper owned by individuals and institutions? Bear failed not because they owned a bunch of bad paper but because Wall Street lost faith in there ability to repay their loans. This is not about sub prime loans, this was simply a run on the bank. I for one am very thankfull that the Fed played Jimmie Stewart. My only complaint is that JP Morgan appears to given a sweetheart deal. Will this be inflationary? I don't know,but we've just gone through some very deflationary mark downs of bank and real estate assets. Protecting a system is more important than free market ideaology. Quote Link to comment Share on other sites More sharing options...
Iggy Posted March 18, 2008 Share Posted March 18, 2008 Bring back the off-topic board for the offseason! I used to enjoy this sort of banter. There just needs to be a way to prevent discussions from ending up in the gutter. Quote Link to comment Share on other sites More sharing options...
billiken_roy Posted March 18, 2008 Share Posted March 18, 2008 I do. Not anyone at the top, whose decision making was ruled by greed, but the lower-ranking analysts and administrative people there who weren't making the decisions that led to this colossal mess. Even though there are plenty among the ranks of those I mentioned who knew better, there isn't much they could have done to stop what the company was doing. Bear Stearns was buying these mortgages in billion-dollar bundles, and not scrutinizing them enough on a fundamental level- i.e. that they were underwritten correctly and the individual borrowers could actually repay the mortgages. 'Who wants to actually sift through and make sure no one's in over their heads when you have Moody's and S&P stamping them with high investment-grade ratings? So what if no one's done due diligence, with ratings like those and an investment bank like ours, what could possibly go wrong?' Coming out of business school in 2005, my impression was that a job at Bear Stearns was one of the sweetest plums. You had to be at the top of your class, have a bunch of other impressive resume pads, know how to present yourself, and know how to kiss some butt to get that job (not to say everyone who works there is or was a butt kisser). Anyway, there are a lot of driven, highly qualified young workers there who might now be relegated to jobs a notch down from where they were. I do feel bad for the ones who had nothing to do with this debacle. pistol do you think this is going to save the jobs of the common bear stearns employees? hell chase is almost across the street and has 2 people capable and waiting to do the work of every one person that bears has on the payroll. sometime next month a chase guy will take over all the work of every bears guy and virtually every little guy is out on the street at bears stearns. the problem wasnt that bears wasnt scrutinizing deals. the problem was that bears stearns was creating b.s. rules to allow these mortgages in the first place. i would bet you that the lion's share of the mortgages used to create the securities at bears followed the rules in place. the problem was the rules were nonsense. to even try to explain sub prime mortgages and the secondary mortgage market here would take pages. but from my perspective as a 15+ year mortgage banker i say good riddance. now figure out how to not let it happen again. that alone would do more to expand the confidence of the consumer than anything. Quote Link to comment Share on other sites More sharing options...
Majerus Magic Posted March 18, 2008 Author Share Posted March 18, 2008 Man I thought Hurbert Hoover died along time ago. Our economic system is built on a solid banking system. It may be philosopically ok to say let the weak go out of business but not practical. Bear does not operate in a vacum. If they fail what is to keep the markets from raiding Citi or Nat City, Lehman or Bank America. How about all the Bear Sterns paper owned by individuals and institutions? Bear failed not because they owned a bunch of bad paper but because Wall Street lost faith in there ability to repay their loans. This is not about sub prime loans, this was simply a run on the bank. I for one am very thankfull that the Fed played Jimmie Stewart. My only complaint is that JP Morgan appears to given a sweetheart deal. Will this be inflationary? I don't know,but we've just gone through some very deflationary mark downs of bank and real estate assets. Protecting a system is more important than free market ideaology. Not so much Herbert Hoover as much as it is free market Quote Link to comment Share on other sites More sharing options...
brianstl Posted March 18, 2008 Share Posted March 18, 2008 Man I thought Hurbert Hoover died along time ago. Our economic system is built on a solid banking system. It may be philosopically ok to say let the weak go out of business but not practical. Bear does not operate in a vacum. If they fail what is to keep the markets from raiding Citi or Nat City, Lehman or Bank America. How about all the Bear Sterns paper owned by individuals and institutions? Bear failed not because they owned a bunch of bad paper but because Wall Street lost faith in there ability to repay their loans. This is not about sub prime loans, this was simply a run on the bank. I for one am very thankfull that the Fed played Jimmie Stewart. My only complaint is that JP Morgan appears to given a sweetheart deal. Will this be inflationary? I don't know,but we've just gone through some very deflationary mark downs of bank and real estate assets. Protecting a system is more important than free market ideaology.The sytem is what got us in this mess in the first place. Which firms do you save. Is a large firm more important than a small firm? Is a job at Bear Sterns to be deemed more important than a job at boutique bank? Quote Link to comment Share on other sites More sharing options...
billiken_roy Posted March 18, 2008 Share Posted March 18, 2008 The sytem is what got us in this mess in the first place. Which firms do you save. Is a large firm more important than a small firm? Is a job at Bear Sterns to be deemed more important than a job at boutique bank? bingo! Quote Link to comment Share on other sites More sharing options...
MusicCityBilliken Posted March 18, 2008 Share Posted March 18, 2008 Bring back the off-topic board for the offseason! I used to enjoy this sort of banter. There just needs to be a way to prevent discussions from ending up in the gutter. Iggy, if everyone conducted themselves as they are in this topic, I be all for it. Lots of excellent discussion and points are being made. If you remember Alumni Fan and Ace going at it with all the name calling, I stayed away from that sewer. Quote Link to comment Share on other sites More sharing options...
willie Posted March 18, 2008 Share Posted March 18, 2008 The sytem is what got us in this mess in the first place. Which firms do you save. Is a large firm more important than a small firm? Is a job at Bear Sterns to be deemed more important than a job at boutique bank? Roy you are missing the point. This is not about the employees of Bear Sterns or their stockholders. This is the 5th largest bank in our system. You can not let them fail because their failure could kill the whole system. As I said before they don't operate in a vacum. American Home Mtg. New Century Mtg, most of Novastar financial were allowed to go broke because the system could absorb that. There is no way Bear could go under without severly impacting our financial system as we know it. Is a large firm more important? Yes because it effects so many more people. Quote Link to comment Share on other sites More sharing options...
brianstl Posted March 18, 2008 Share Posted March 18, 2008 Roy you are missing the point. This is not about the employees of Bear Sterns or their stockholders. This is the 5th largest bank in our system. You can not let them fail because their failure could kill the whole system. As I said before they don't operate in a vacum. American Home Mtg. New Century Mtg, most of Novastar financial were allowed to go broke because the system could absorb that. There is no way Bear could go under without severly impacting our financial system as we know it. Is a large firm more important? Yes because it effects so many more people.Willie Bear did go under yesterday. The banking indrustry still existed today. The only thing that resulted was JPMC getting the Bear Stern name, a chance for great reward, and no risk. The government (we the taxpayers) has agreed to pick-up any liabilities from the deal. Quote Link to comment Share on other sites More sharing options...
moytoy12 Posted March 18, 2008 Share Posted March 18, 2008 Iggy, if everyone conducted themselves as they are in this topic, I be all for it. Lots of excellent discussion and points are being made. Agreed. Good stuff guys. Quote Link to comment Share on other sites More sharing options...
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